Rugs moving beyond traditional channels
By Lissa Wyman -- Furniture Today, April 18, 2004
HIGH POINT — Rug exhibitors are coming to the High Point market with renewed confidence. Business not only has picked up steam, but is expanding well beyond the realm of traditional specialty and department store channels.
With most major vendors exhibiting at seven or more shows a year, High Point is not a make-or-break event for the rug industry. If things don't go so well in April, rug resources get another chance to show their wares in July in Atlanta.
Leon Capel, president of Capel Inc., summed up the view of the rug industry this way: "Rugs are strictly an accessory item for the home furnishings business, so there is a pull-through effect. If business is good, a furniture store will find time to buy rugs. Fortunately, we've got so many ways to sell rugs that we don't have to rely on only one channel of distribution."
Capel and other industry executives noted that mass-market stores, linen chains and catalogs are becoming increasingly important for the rug business. Many large rug vendors are developing specialized product lines for specific retail channels.
Although every rug producer is offering new rug collections, this spring the industry's focus is on marketing its products to individual channels of distribution.
"I think we will see even more differentiation in the future," said Jeff Meadows, vice president of Shaw Living. "Specialty stores and mass-market companies will not only have different merchandise, the sales organizations will also be different."
Oriental Weavers has merged its two divisions in the past six months, reflecting the trend to differentiated products and specialization by market channel. Mike Riley, senior vice president of the Sphinx division, said the Sphinx arm now focuses primarily on specialty stores and department stores, while Oriental Weavers of America concentrates on mass-market stores.
As a result of this shift, OWA's High Point showroom has been closed, while the Sphinx showroom was recently expanded. Conversely, the lion's share of the company's New York showroom now is devoted to OWA products.
"We are expecting a very strong High Point market," Riley said. "All of our customers are extremely positive about the changes in the company's approach."
Sphinx will preview its National Geographic collection in High Point, prior to the major debut in July at the Atlanta International Rug Market. High Point marketgoers also will see the company's Andy Warhol collection, which was launched in January.
"The Warhol collection is an ideal product for home furnishings channels. It got a huge reception in January, and we think it will be one of our most successful introductions ever," said Riley.
Harounian Rugs International is pointing its marketing efforts directly at furniture stores and has renovated its High Point showroom. The new look reflects the needs of home furnishings retailers, according to Christie Arnoult, sales manager.
"We are displaying rugs to show how they coordinate with the color palettes and style themes of the major home furnishings manufacturers," said Arnoult. "We are also developing a new sales team of furniture specialists who understand the challenges of integrating rugs into the furniture mix."
Rita Karmiol, vice president of sales for Nourison, said business has been strong, but that doesn't mean it's time to relax.
"We have to aggressively go after the business," Karmiol said. "We have to be in our customer's faces every day of the week. No matter how successful we have been, we must always be proactive and respond to their needs. It's the only way to ensure continued success."
As the rug business continues to diversify, resources must be even more aggressive in introducing new fashion looks.
"This used to be an industry that made major introductions once a year. Now we are updating on a year-round basis, and we are developing new items for each market channel," said Joan Catello, vice president of sales at Kas Oriental Rugs. "It's not good enough to merely keep up with home furnishings styles and colors. Now we are committed to being fashion leaders."
The success of last month's New York Home Textiles Market has been responsible for at least some of the renewed buoyancy in the rug market.
"The New York textiles market was the best ever; we had the right products and price points," said Reza Momeni, president of Momeni. "We think the momentum will continue in High Point, and that business will continue to expand for the rest of the year."
Aaron Hakimian, marketing and accounts manager for Rugs America Corp., said the importer is developing a strong marketing program targeted specifically to multi-store channels.
"We are aiming primarily at multi-unit furniture stores, department stores, national specialty chains and mass-market stores with midlevel imported rugs," said Hakimian. "Our goal is to bring in high-styled products at reasonable prices."
Bob Kirby, president of Jaipur Rug, said the hand-knotted specialist continues to expand into the middle range of the market. While there seems to be renewed strength in high-end rugs, mid-level price points "are certainly where the action is," he said.
Jaipur is introducing more rugs under $1,000, he added.
"We still take great pride in the quality and value of our rugs," Kirby said. "Now the value is even better. It was a difficult decision to make, but it is already paying off. We have had three record months in a row."
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